China to build on disputed shoal in South China Sea

Boats at Scarborough Shoal in the South China Sea are shown in this handout photo provided by Planet Labs, and captured on March 12, 2016. REUTERS/Planet Labs/Handout via Reuters

BEIJING (Reuters) - China will begin preparatory work this year for an environmental monitoring station on Scarborough Shoal in the South China Sea, an official said, as two U.S. senators introduced a bill to impose sanctions on its activities in the disputed waterway.

China seized the strategic shoal, which is also claimed by the Philippines, in 2012 and the United States has warned Beijing against carrying out the same land reclamation work there that it has done in other parts of the South China Sea.

This week, Xiao Jie, the mayor of what Beijing calls Sansha City, an administrative base for disputed South China Sea islands and reefs it controls, said China planned preparatory work this year to build environmental monitoring stations on a number of islands, including Scarborough Shoal.

The monitoring stations, along with docks and other infrastructure, form part of island restoration and erosion prevention efforts planned for 2017, Xiao told the official Hainan Daily.

The report comes ahead of a visit to Beijing at the weekend by U.S. Secretary of State Rex Tillerson, where he is expected to reiterate U.S. concern about Chinese island building.

Tillerson has called the activity "illegal" and last June, then U.S. Defense Secretary Ash Carter warned that any move by China to reclaim land at Scarborough Shoal would "result in actions being taken by the both United States and ... by others in the region which would have the effect of not only increasing tensions, but isolating China."

A spokeswoman for the U.S. State Department, Anna Richey-Allen, said it was aware of the Chinese report and reiterated a call on South China Sea claimants to avoid building on disputed features.

The Philippine foreign ministry declined to comment, saying it was trying to verify the reports.

Washington stresses the importance of free navigation in South China Sea, through which about $5 trillion worth of trade passes each year. China claims nearly all of the sea and Washington is concerned its island-building is aimed at denying access to the waters.

This week, U.S. Senators Marco Rubio and Ben Cardin introduced the South China Sea and East China Sea Sanctions Act, which would ban visas for Chinese people helping to build South and East China Sea projects.

It would also sanction foreign financial bodies that "knowingly conduct or facilitate a significant financial transaction for sanctioned individuals and entities" if China steps up activity at Scarborough Shoal, among other actions.

Chinese Foreign Ministry spokeswoman Hua Chunying called the bill "extremely grating" and said it showed the "arrogance and ignorance" of the senators.

Bonnie Glaser, an Asia expert at Washington's Center for Strategic and International Studies think tank, said it was unclear if China planned dredging work at Scarborough Shoal, something that could wreck efforts to agree a code of conduct for the region that Beijing professes to support.

She noted that parties to a 2002 declaration of conduct had agreed to refrain from inhabiting uninhabited features.

During his January confirmation hearing, Tillerson said China should be denied access to islands it has built up in the South China Sea. He subsequently softened his language, saying that in the event of an unspecified "contingency," the United States and its allies "must be capable of limiting China's access to and use of" those islands to pose a threat.

(This version of the story was corrected to fix spelling of Glaser in paragraph 13)

(Reporting by Ben Blanchard and Christian Shepherd; Additional reporting by Manuel Mogato in Manila and David Brunnstrom in Washington; Editing by Clarence Fernandez and James Dalgleish)